Baku, Azerbaijan : A group of 10 leading multilateral banks, including the World Bank, European Investment Bank (EIB), and Asian Development Bank (ADB), have announced a significant pledge to channel $120 billion annually by 2030 to support climate finance initiatives in low and middle-income countries, including Nigeria.
The landmark commitment was made during the ongoing UN Climate Change Conference cop 29 Baku, Azerbaijan, as world leaders and financial institutions seek to accelerate climate action and mitigate the effects of climate change.
In addition to the $120 billion annual commitment, the banks also dedicated $42 billion towards adaptation measures, designed to help vulnerable countries cope with the devastating impacts of extreme weather events, rising sea levels, and other climate-related challenges.
Nadia Calvino, president of the European Investment Bank, emphasized the increasing role of the private sector in climate financing. According to Calvino, private sector participation is essential as the costs associated with climate change continue to rise, and the urgency to act grows.
The private sector now fully understands the unsustainable costs of inaction on climate change. It’s no longer just about discussions; we need immediate action. Together, we must mobilize both public and private finance to make the most significant impact on the ground,” Calvino said.
The pledge reflects the growing global recognition of the need for bold, collaborative efforts to address climate change, particularly in countries that are most vulnerable to its effects.
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The Financing Gap: A Call for Greater Global Commitment
While the $120 billion annual pledge is a significant step forward, the gap in climate financing remains large. According to the United Nations Environment Programme (UNEP), the annual financing needed for adaptation alone is estimated to range between $187 billion and $359 billion. This highlights the critical need for continued and expanded financial commitments, especially from developed nations, to meet the demands of climate adaptation and resilience.
The multilateral banks have stressed that their ability to increase funding for climate projects will depend on the support and commitment of their shareholders, including both developed and developing countries. Their call underscores the importance of a global partnership to address the complex and far-reaching impacts of climate change.
A Turning Point for Climate Action: What’s Next?
The pledge made by the multilateral banks marks a turning point in global climate finance. As countries like Nigeria stand at the forefront of climate vulnerabilities, the infusion of funds from international financial institutions offers an unprecedented opportunity to scale up adaptation projects, enhance resilience, and foster sustainable development.
However, the banks have cautioned that the success of these efforts hinges on continued political will, international cooperation, and increased engagement from both the public and private sectors.
The Role of COP29 in Shaping Climate Finance
As COP29 continues in Baku, the spotlight remains on how nations, financial institutions, and the private sector can work together to bridge the financing gap and secure a sustainable future for vulnerable countries. The commitment of $120 billion annually by 2030 is a promising start, but as the UNEP’s figures indicate, much more will be needed to tackle the full scale of the climate crisis.
The next steps will require coordinated global action to ensure that the funds are effectively mobilized, allocated, and implemented to meet the pressing climate challenges faced by the world’s most vulnerable populations.
